## Facts

- A developer contracted to sell a condominium unit in a large high-rise project to purchasers for $73,700.
- The purchasers paid $525 before signing and tendered an additional $6,870 check so the total approximated a 10% down payment.
- Shortly after signing, the purchaser-husband learned he would be transferred out of the area, notified the developer he could not complete the purchase, and stopped payment on the $6,870 check.
- The developer attempted to collect the check; it was dishonored.
- The contract included a liquidated-damages clause providing that, upon purchaser default, the seller’s remedy was retention of “such monies paid” by the purchaser.
- The developer sued seeking specific performance of the purchase agreement or, alternatively, liquidated damages of $6,870.
- The case was heard on the developer’s motion for summary judgment in the Chancery Division.

## Issues

1. Whether a vendor may obtain specific performance to enforce a contract for sale of a condominium unit, or whether the vendor must show special circumstances demonstrating the inadequacy of damages.
2. Whether, under a liquidated-damages clause limited to “monies paid,” the vendor may recover an additional down-payment amount tendered by a stopped check that was never collected.

## Decision

- Specific performance was denied.
- The court held that a vendor is not automatically entitled to specific performance of a real estate contract; the remedy should be confined to situations where legal damages are inadequate or other equitable considerations warrant relief.
- The court treated the unit as a standard, marketable condominium in a large development with a fixed contract price, making damages readily calculable and resale feasible.
- Liquidated damages were limited to the $525 deposit actually paid at the time of breach.
- The court refused to award $6,870 as liquidated damages because the stopped check was not “money paid” under the contract’s clause.

## Legal Principles

- Specific performance is an exceptional equitable remedy; a vendor must show damages at law are inadequate or that equity otherwise requires performance.
- The traditional “uniqueness of land” rationale does not justify automatic vendor specific performance where the seller can be made whole through money damages and resale is practicable.
- A liquidated-damages clause limiting recovery to amounts already paid is enforced according to its terms and does not permit recovery of unpaid sums as “liquidated damages.”
- In construing liquidated-damages provisions keyed to “monies paid,” an uncollected or dishonored check is not treated as payment.

## Conclusion

The court denied a developer’s request for specific performance of a condominium sale contract because the developer failed to show an inadequate legal remedy, and it enforced the contract’s liquidated-damages clause by limiting recovery to the deposit actually received, rejecting recovery of the amount represented by a stopped and dishonored check.


Centex Homes Corp. v. Boag, 128 N.J. Super. 385, 320 A.2d 194 (Ch. Div. 1974)